Saturday, July 4, 2009

When Bakili Muluzi started going around the country with match boxes, iron sheets and bars of maluwa soap to argue against high economic growth pundits condemned him. Their argument being that he had little understanding of inflation. Others argued Muluzi could have also gone to the rallies showcasing 50kg bags of fertiliser given “cheaper prices” apparently due to the fertiliser subsidy. True but cheap reasoning all together. Its all at tax payers expense. Better call it voodoo economics. However, a certain level of sense is apparent particularly if one clearly articulates the limits of economic growth.Malawi’s economic growth has been touted as a success story by the international community. That such a hungry and least developed country is a second fastest growing economy in the world is thrilling. Not only does it make most of us think great of our country and its future but possibly with anticipation of an environment awash with opportunities.Is it real? Probably yes but with some heavy headed doubting Thomases. Questions still abound whether our growth is pro-poor and henceforth barefeet Malawians in Thundubike (Mzimba), Mwalasi (Machinga) or Makiyoni (Salima) can collaborate this much touted high growth rates. This is where politicians like Muluzi often come in and display merchandise using chicken economics to gain political mileage. But behind such reasoning, there is a genuine and hidden story that puts in question whether economic growth as measured by change in GDP results in improved quality of life.Amid this high level of growth, generated by maize production our vulnerabilities have been exposed. Maize has not generated any revenue as most of it is just consumed by households and not traded across the border in a manner that boosts the foreign reserves of the country. Why is our import cover perpetually under 2 months? Reports of hunger last year were rife and government had to swallow its pride and ban maize exports. Such decisions were made in a fast growing economy putting in doubt the efficacy of growth generated through a what i term a maize subsidy. Would a high growth economy ban exports? I have my founded doubts. Turn to the obituary pages of daily papers and see the many young faces that have prematurely gone. Their ages average under 35. And then get into a car or a bus and drive on the main roads linking the cities and the likelihood of bumping into a truck fishing hazards carrying a dead body are high. Apparently, this is if you live in the cities but in the rural areas the trend is the same except that they carry the dead bodies in an ox-cart. Does this story link up well with a fast growing economy? Its a health crisis? An emergency case in Ntchenachena, Chididi and Mposa are a death sentence though the economy is growing.Their is a health and education crisis in this country. Rich folks go to those elite facilities to access health services and education for their families. I am not being jealousy wish for the riches. Over 80 per cent of Malawi’s population lives in rural areas whose health centres are often manned by an enrolled nurse without adequate medication. Distances to such facilities plus the state of rural roads complicate the situation. I am not being sadistic but to say that health services are equally bad as education especially in the rural areas. Unfortunately, this is where the majority of our people live and resigned to a life that offers no hope and future. Global poverty according to the World Bank is due to China’s reducing hardship through pr0-poor growth. Similar trends have happened in other parts of South East Asia such as Malaysia and South Korea. Setting the pace to development is targeting the majority of the population that is poor. This would perhaps work in Malawi.Such a story does not end here as my critics will obviously argue that the tergetted inputs subsidy is one such approach. Not sure whether this is correct given the major anomalies. I will not dwell on this one. But to any reader of economic development, human capital is an indispensable source of growth as it offers those with a good education to better opportunities. By human capital I mean a workforce that is well educated.Malawi’s high growth is coming with unskilled farmers who rely on a fertiliser subsdsiy and the mercy of rains using a wooden hoe since the Iron Age. What else part from farming will a typical peasant do? The education is limited, life is hopeless and we keep on reproducing as evidenced in the ballooning population growth rate of 2.6 percent. Yet despite such warnings, Malawi has four government owned Technical Collegs of Mzuzu, Lilongwe, Soche and Salima plus a few others belong to the churches. Where will all these young people go to? Most of them are getting driving licenses in the hope of becoming minibus drivers via the “touting or callboy” channel. Two public universities with an annual intake of under 2000 for over 15,000 eligible young people. What is the role of education planning?

Somehow, I have a belief that our growth is not pro-poor and the majority of the folks are missing out. There is no need for evidence but I can cite the rise in social ills as a major indicator of the limited benefits of our high economic growth. Go around orphanages and see the number of children with both parents still living dumped there. Recent waves of violent crime in the country are a vivid smoke of unequitable growth. Incidences of rising prostitution and other violent sex offences tell it all. Congestion in prisons due to increasing criminal convicts bares testimony about lack of opportunities that economic growth is supposed to bring. When times increasingly get tough people resort to unorthodox coping mechanisms.Not sounding very circumstantial in the case I build, there are enough pieces of meat to question the limits that economic growth can achieve. Providing high quality education and health services to the poorest plus a general enabling environment principles of equity thrive makes economic growth meaningful. At the rate we are going, a majority is being left behind. Yes they need fertiliser but they need to have a good education and health including equitable access to public services. Economic growth to me does not guarantee success if the majority of a vulnerable population are left behind. Otherwise we will still various versions of Bakili Muluzi going around with a few merchandise preaching voodoo economics.

How big should a cabinet be? A question not properly answered given that cabinets are often presidential prerogatives. Similarly, there is no rule about the number of advisors the presidency should have. Bingu Wa Muntharika after his massive win hired a “lean” 43 sized cabinet that confounded critics in a matter of ways. The size has been considered huge and the faces astounded many given Bingu’s new name “unpredictable”.I ponder on the question of what a cabinet does. In principle a cabinet formulates policy that line ministries implement under the leadership of the elected president. Before we become overlay critical of the current cabinet it is good to consider the achievements of the previous one. The Malawi economy has grown tremendously since 2005. Without pointing at the sources of growth, I would speculate that there was a cabinet that “crafted policies” pro-growth. I can draw critics on this one because there are lots of exogenous factors. Malawi committed itself to budgetary reforms evidenced by reduced fiscal deficits, good rains, debt relief and general confidence of the international community. To add it all Malawi had a president who was very much in tune with global politics and a finance minister who was hands on and knew exactly what to do.Enter phase two of Bingu’s presidency. A massive change in the cabinet composition. Out goes Mussa. Phoya, Katsonga and Lipenga. Folks that stood the storm orchestrated by Bakili Muluzi and JZU with blazing horns of Nga Mtafu, Clement Stambuli and many others. Then another influx of MPs with enviable credentials. Goodall Gondwe shifts to Local government, Chaponda education, Kaliati to Gender etc. Other notable surprises include Ken Kandodo into finance, Mwanza into housing and on a lesser note Billy Kaunda pulls his own surprise.With all these changes, one has a genuine reason to question the size of a cabinet. While it is a presidential prerogative, cabinet is run on tax payers’ money. Perhaps Bingu is being pragmatic and hiring a team that can help him realise a dream of an export led growth Malawi. We will judge him by 2014. I have always wondered whether cabinet ministers really perform. In the post 1994, Malawi, I reckon that a cabinet minister can only perform if there is a lot of political will and support from the president. Remember the 10 point Chikaonda? What about freeze sometime in Muluzi’s regime amid serious governance issues? The late night threatening calls to Chikaonda wisdom thinking about not hosting a SADC summit? I think the same applies to Goodall Gondwe. He has performed simply because Bingu gave him the support. The same Goodall Gondwe was Chief Economic advisor to Bakili Muluzi. To coin it all we perhaps do not lots of ministers because the President basically does most of the things. Most ministers are all over familiarising themselves on those costly tours. Nonetheless, I believe Bingu will render support to the folks hired into his cabinet otherwise there might be just baggage on the tax payer. Unfortunately, the reality of a political system is that there is need to balance up genuine needs of the country and political interests given a turbulent parliament Bingu experienced. We just need to keep our eyes open to not sleep on the train and ensure that elected public officials are accountable.When are the local government elections?

About Me

I blog on issues of economic development such as education, corruption, health, business and poverty. I also write a weekly column in The Malawi Nation Newspaper (www.mwnation.com) that appears every Friday-the title of my column is "Business Intelligence"